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I
have a business mentor and neighbor who always inspires me when we get together,
and he gives me great ideas and sound business principles. He is also very
rich.

I have a
business mentor and neighbor who always inspires me when we get together and he
gives me great ideas and sound business principles. He is also very
rich. I check his mail for him since he is very rarely at his home in our
neighborhood. He has three other homes, all paid for with cash, and one that he
has only been to twice in six years.

Last year I called him
up to tell him there was a check from the IRS and he told me to open it up. It
was a check for $400,000. Last Thanksgiving he was in town and I took him
another IRS check that had been in his mailbox. When I gave it to him, he
opened it and nonchalantly said, “Hey, look at this.” It was a check for
$2,300,000!

He owns factories around the world and used to
have thirty different companies. Two really important business questions that I
have posed to him have influenced my business practices substantially and those
questions are:

How
do you spend your day, having so many businesses?

How
do you treat your employees?

The answer
to question number one ought to inspire you as it did me. He said that he looks
at the numbers. If a company is doing well, he leaves it alone. If it has some
numbers that don’t look as they should, he steps in.

Let me
ask you this question about your company. Do you have those types of numbers
handy in your business? Can you look at your P & L, Balance Sheet,
Up-sells, Phone Log, Marketing Report, etc. and get an accurate picture of your
company’s health? That ought to be the goal of every entrepreneur.

IF YOU CAN MEASURE IT, YOU CAN MANAGE IT.
IF YOU CAN’T MEASURE IT, YOU WON’T BE ABLE TO UNDERSTAND IT!

Now then:
How do you treat your employees? When I asked my neighbor this question his
answer was quite simple. He said that he finds great people, let’s them have
plenty of responsibility and pays them very well. As I already mentioned, when
the numbers look good, he leaves well enough alone. If not, then a call or
visit is in order.

Fortunately, for those of us in the
carpet cleaning and restoration industry, we can pay our people well because we
are in businesses that can have a high profit margin. If your profit margin is
less than 20%, you need to do something about that because you may not be able
to pay your people in a manner that is
going to keep them happy and around for a long time. I like my neighbor’s plan
and you should, too. Find great people and pay them well.

By
the way, one thing that I found out the hard way over the years is this. If
someone is a low performer, they have got to get better or they will be let go.
Don’t let low performers destroy your company and your life and mental health.

OK, great
Dave, so in our industry, what does great pay look like? I am going to tell you
how we pay our people at my company, located in Pensacola, Florida. Of course,
every area of the country is different and has cost of living factors but you
will get a general idea that should be helpful.

For the
most part, every job has some sort of incentive pay. When I went from strictly
hourly pay to incentive pay, my profits skyrocketed. People ought to be paid on
how they perform. If someone is fast and can up-sell, they should be rewarded
for that and not be paid the same hourly rate as someone who can’t hold a
candle to their abilities. So, here goes.

Our
technicians are paid $8 to $9 an hour plus a bonus of 8% of the production they
bring in. we operate one man trucks. Additionally, they are paid a 12% bonus on
any up-sells. So, if they do a job for $200 and have a $100 up-sell in which
they also do the work of the up-sell, say they clean a sofa as an up-sell, they
will make their hourly rate plus 8% of $300 and 12% of $100.

Our office
manager makes an hourly rate of $11, and if the company does over $20,000 for
the week, she receives a $50 bonus. Also, any job that she gets over the phone where
she has to sell the prospect on our company, she receives a $3 bonus. Our
office assistant is paid $9 an hour and she receives the same $3 bonus for
booking a new job. She also takes flyers to our established customers on
Fridays and if she finds a new office to display our material, she gets a $5
bonus. Notice, I always say bonus and not a commission because if you want to
take a bonus away for any reason, tardiness or whatever, you can. You cannot do
that with commissions.

Our operations
manager is paid a monthly salary plus 3% of the gross profit. Why the gross profit,
you ask? The reason being is that he is in control of the technicians’ hours
and the more efficient they are, the bigger his bonus. The gross profit in our
company is the sales minus service labor and chemicals. He supervises both
service labor and chemical usage, so the items that he is in charge of, are the
items that are part of his bonus.

Our
marketing director is paid a salary of $30,000 plus a bonus of 3% to 5% of the
business that she brings in. As long as she is employed by the company she will
receive 3% to 5% of the sales generated through her efforts. She does a great
job and has been averaging $30,000 and up per month in sales!

The only
people in our company that continue to be paid and hourly rate are our
restoration technicians. Incentive pay is a bit tricky to figure out for them.
We want them to be thorough, so speed is not an issue and rarely can they
up-sell anything. Consequently, we just pay them very well.

Finally, my
vacation pay for all full-time employees is exceptional. They see me on
vacation all the time and I figure that they can use time off, too. My folks
get great vacation pay but I believe it keeps them happy, refreshed and with
the company. After six months, they receive a week’s paid vacation. One year
and they get two weeks paid. Three years, three weeks paid; five years, a month
paid; seven years, five weeks paid; and twelve years, six weeks paid. You may
think this idea to be very expensive but have you considered the enormous cost
of training new employees? That cost is substantial, and a vacation program
like the one I just described is one fabulous way to keep great people on your
staff.

In
conclusion, take heed and find great people, pay them well, and chances are you
will be able to do lots of fishin’, golfin’ or whatever your heart
desires!

Did you enjoy this article? Click here to subscribe to i Cleaning Specialist Magazine.

Dave DeBlander is the owner of Pro Clean Restoration and Cleaning, a
turn-key carpet cleaning/ restoration business in Pensacola, Fl. He is also an
author, speaker and business consultant. His books include 40 Words (To Awaken the Entrepreneur Within); 40 Days (To Awaken the
Power Within); How to Get Off the Truck and on to the Beach; and How to Develop a Turn-Key Business. His
business products include the Upsell Video and The Game Changer Business
Performance Program. He can be reached at www.davedeblander.com and
850-637-SELL.

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